Financial troubles plague Worcester’s Willis Center

Sunday

Jan 29, 2012 at 6:00 AM

Aaron Nicodemus ON BUSINESS

For the second time in five years, the Henry Lee Willis Center is in serious financial trouble.

The center is a 20-year-old Worcester nonprofit organization that provides substance abuse counseling, foster care and housing for children and adolescents, services for developmentally delayed adults, and aid to homeless families. In 2010, the minority-led agency had $11.8 million in revenue and $11.2 million in expenses. At the beginning of this fiscal year, which began July 1, the center had a $285,000 negative balance, according to its president and chief executive officer, Carlton A. Watson.

“A number of our programs have been posting losses,” Mr. Watson said last week. “We don’t have a cushion to draw on; we have no margin. When reimbursements are cut or the number of placements (in programs) decline, it hits like ‘whomp,’ and we’re stuck.”

The center has had to delay paychecks to its 185 full- and part-time employees, once right before Christmas, and again last week. As of Friday, the Willis Center was still waiting for a state reimbursement to be paid into its account in order to release paychecks to some of its employees. Employees say the center has been rationing copy paper and not filling water coolers.

Matthew Young of Millbury, a senior family partner in the center’s Families and Communities Together program, said he has watched his department shrink from 16 employees to five in two short months.

“Some employees have stopped coming to work, because they can’t get reimbursed for their gas,” he said. “We can’t effectively do our jobs with this hanging over us.”

Even though his unit is profitable, Mr. Young said that cutting the staff (or not replacing people who leave) has meant the department cannot serve as many families. That means less billable hours, and less money for the center.

“And it means we have to turn away people who really need us,” he said.

Wendy Campbell of Leominster, an intensive care coordinator for the Families and Communities Together program, has put in her resignation.

“They’ve been putting me in financial crisis,” she said “They said, ‘I’m sorry,’ with a smile, but a smile doesn’t pay my bills. I love what I do, but I don’t work for free.”

Sarah Carmichael of Clinton was laid off from one of the two part-time jobs she had through the center, as a substance abuse counselor, and then she announced her resignation from the other job, as an intensive care coordinator.

“Every pay period has been a question about whether we’re going to get our paychecks,” she said. “I can’t afford to wonder if I’m going to get paid on Fridays.”

Mr. Watson said he empathizes with his employees.

“Our obligation is to pay them, on time, and when we don’t, we fail in that obligation,” he said. “I will be so happy and relieved when we have a solution.”

Up to now, the solution has been to cut back programs and lay off employees. Mr. Watson said the center has reduced the amount of office space it leases at its Front Street headquarters, cut down its outpatient substance abuse program to the “bare bones” and laid off or accepted resignations from 25 to 30 employees in the span of two months.

Mr. Watson said he has agonized over the financial crisis, and the reasons behind it. He explained that because the nonprofit depends on closed referrals from state agencies, such as the Department of Children & Families, it cannot control how many cases (people) come through the door in any given week. When the program’s numbers drop, the center’s reimbursement drops. But the costs do not.

Five years ago, the center was rocked by a financial crisis similar to this one. The center closed three residential programs and laid off 75 people in order to keep its other programs going.

Ninety-five percent of the center’s revenue comes from the state, with only a tiny sliver coming from private foundations and donations. With no endowment to fall back on, every ripple in program enrollment numbers acts like a wave, he said. Although the center has little debt, it has little ability to get short-term loans, even to meet payroll, Mr. Watson said.

But there is hope.

On Tuesday, the Willis Center’s board of directors will meet to discuss a “strategic partnership” with another Worcester nonprofit. Mr. Watson said if the partnership comes to pass the Willis Center’s finances will stabilize. He said he could not talk more about the partnership until after the board meeting this week.

“We will do anything to preserve the center and provide the services that are so needed in the community,” he said. “It will be solved. It has to be solved.”

Contact Aaron Nicodemus at anicodemus@telegram.com or at (508) 793-9245.